Overbought
Overbought describes a market condition in which an asset's price has risen markedly within a relatively short period, suggesting that current buying pressure may be excessive. In technical analysis, overbought is a qualitative assessment rather than a precise price level. It is commonly signaled by momentum indicators such as the relative strength index (RSI) when readings exceed 70, or by oscillators like the stochastic oscillator when values rise above 80. Some traders also interpret sustained price action above key moving averages as a sign of overbought momentum.
Interpretation of overbought signals depends on context, including the asset, time frame, and prevailing trend. An
Practical use involves risk management and confirmation. Traders may reduce exposure, take profits, or tighten stop-loss